Stock Analysis

Analysts Are Upgrading Bharat Petroleum Corporation Limited (NSE:BPCL) After Its Latest Results

NSEI:BPCL
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As you might know, Bharat Petroleum Corporation Limited (NSE:BPCL) recently reported its full-year numbers. The result was positive overall - although revenues of ₹4.5t were in line with what the analysts predicted, Bharat Petroleum surprised by delivering a statutory profit of ₹126 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Bharat Petroleum after the latest results.

Check out our latest analysis for Bharat Petroleum

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NSEI:BPCL Earnings and Revenue Growth May 12th 2024

Taking into account the latest results, the current consensus from Bharat Petroleum's 15 analysts is for revenues of ₹4.85t in 2025. This would reflect an okay 7.7% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to tumble 41% to ₹72.79 in the same period. In the lead-up to this report, the analysts had been modelling revenues of ₹4.48t and earnings per share (EPS) of ₹61.18 in 2025. So it seems there's been a definite increase in optimism about Bharat Petroleum's future following the latest results, with a nice increase in the earnings per share forecasts in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹604, suggesting that the forecast performance does not have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Bharat Petroleum, with the most bullish analyst valuing it at ₹860 and the most bearish at ₹375 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Bharat Petroleum's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.7% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% annually. So it's pretty clear that, while Bharat Petroleum's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Bharat Petroleum's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at ₹604, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Bharat Petroleum analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Bharat Petroleum (of which 1 is a bit unpleasant!) you should know about.

Valuation is complex, but we're helping make it simple.

Find out whether Bharat Petroleum is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.